Consumers can sell excess solar power to Discos – FG

The Nigerian Electricity Regulatory Commission has commenced the implementation of the Net Billing Regulations 2026, creating a framework that will allow eligible electricity consumers with renewable energy systems, particularly solar installations, to generate electricity for their own use and sell surplus power to electricity distribution companies.

The development is expected to accelerate the adoption of renewable energy technologies across the country, encourage private sector investment in power generation, and provide an additional source of electricity supply to the distribution network.

In a public notice titled “Commencement of the Net Billing Regulations 2026” and released on Wednesday, the commission notified electricity consumers, distribution companies, renewable energy developers, commercial and industrial customers, and the general public of the commencement of the new regulatory regime.

According to the regulator, the framework is designed to transform eligible electricity customers into what it describes as “prosumers” — consumers who not only use electricity but also generate it.

The commission also specified that participating customers must have a “renewable energy system with a minimum installed capacity of 50 kilowatt peak and a maximum of 1.5 megawatt peak”.

It stated that the regulations establish a framework that enables “eligible electricity customers (prosumers) to generate electricity from renewable energy sources, primarily solar photovoltaic systems, for their own consumption and export surplus energy to the distribution network under a net billing arrangement.”

The arrangement effectively creates a pathway for businesses and institutions with large solar power installations to monetise excess electricity that would otherwise remain unused.

Under the framework, a customer with a solar power system will first consume electricity generated from the installation. If the system produces more electricity than is required at any given time, the excess energy can be exported into the distribution company’s network.

The amount of electricity exported will be measured through specially installed bidirectional meters capable of recording both electricity consumed from the grid and electricity supplied to it.

The exported energy will then be credited in accordance with tariffs approved by the commission. The regulation marks a significant shift from the traditional electricity consumption model in which customers solely purchase power from the grid.

Under the new arrangement, eligible customers can become small-scale power producers capable of supplying electricity back to the network.

Experts say the model could prove particularly attractive to factories, shopping malls, universities, hospitals, industrial estates, telecommunications facilities, and large commercial enterprises that already operate substantial solar power systems.

For many of these organisations, solar installations often generate excess electricity during peak sunshine hours, especially on weekends or periods of reduced operational activity. The new framework allows such surplus generation to be utilised rather than wasted.

NERC said the regulations are aimed at achieving several strategic objectives within the electricity sector.

According to the commission, the objectives of the Net Billing Regulations 2026 are to promote the adoption of renewable energy technologies, enhance energy security and reliability for electricity consumers, encourage private sector participation in distributed generation, support the reduction of greenhouse gas emissions, and facilitate efficient integration of renewable energy systems into distribution networks.

The regulation comes amid growing interest in alternative energy sources as businesses and households continue to seek more reliable and cost-effective power solutions.

Nigeria’s electricity sector has struggled for years with inadequate generation, transmission constraints, and distribution challenges, leading many consumers to invest heavily in self-generation through diesel, petrol, and increasingly solar-powered systems.

The commission believes the new framework will help unlock private capital for renewable energy development while reducing pressure on the national grid. To qualify for participation, customers must meet a number of conditions set out by the regulator.

NERC stated that participants must be connected to a distribution licensee’s network and install renewable energy systems that comply with applicable technical standards and regulatory requirements.

Producers must obtain approval from the relevant distribution licensee, execute a net billing agreement, and register with the commission. The capacity threshold indicates that the scheme is targeted primarily at medium- and large-scale consumers rather than residential customers with small rooftop solar systems.

The commission said interested customers would be required to undergo technical evaluation before being admitted into the scheme. According to the notice, interested customers are required to apply to their distribution licensee for a technical feasibility assessment.

NERC added that upon approval and execution of a net billing agreement, the applicant shall register with NERC in accordance with the provisions of the regulations. The commission further stated that successful applicants would receive metering infrastructure necessary for implementation of the scheme.

“Approved participants shall be provided with appropriate bidirectional net metering facilities to measure electricity imported from and exported to the distribution network. Exported energy shall be credited in accordance with the export tariff approved by the commission,” the commission said.

The introduction of net billing aligns with broader efforts to increase the role of renewable energy in Nigeria’s electricity mix and support the country’s energy transition goals.